D.B.
If you are going to lose the money either way, I would hold out a little longer. I would also talk with the people doing the renting. We live in Florida, and I know the cancellation penalties have been reduced and/or eliminated for many places in light of the oil spill.
There is no way they can know for sure at this time where the oil will end up or how bad it will be. It only reached Pensacola on Friday, when it was predicted to hit them several weeks ago; the winds shifted. We in the Tampa area aren't expected to get it at all. If and when it reaches Myrtle Beach, it may not be much of anything because of the distance it has to travel.
Let me reiterate the importance of talking with the rental company to find out their "oil spill" plan. I think they would rather work with you than have you cancel entirely now. And I think you would still be able to enjoy the beach to some extent even if the tar balls start to wash up. I don't think it will be anything like what you see coming out of Louisiana, where everything is coated with oil.
I hope you are able to enjoy your vacation. So many people are canceling even in areas not affected, and it's hurting the local economies, something no one can really afford right now. It's very sad.